Asia-Pacific employment law bulletin 2023
The gradual reopening of the Philippine economy in 2022 brought the promise of a better year. However, with global inflation, aggravated by the effects of the Ukraine war, much of the optimism has been dampened. The proliferation of the new Omicron variant, threatening a surge of Covid-19 in different parts of the world including the Philippines only deepened the anxiety amongst the general public. Towards the last quarter of the year, the looming threat of a global recession has precipitated an increase in the number of queries relating to company reorganizations and possible implementation of redundancy programs in 2023.
There were several developments in the field of employment law in the Philippines in 2022. With the Covid-19 pandemic settling down and workers returning to onsite work, the Philippines continued to transition and adapt to the new normal with policies that benefitted employees and employers alike.
In 2023, we look forward to the steps that the new administration of Ferdinand Marcos, Jr., who took his oath of office as the 17th President of the Philippines in June 2022, will take to spur a full recovery of the Philippine economy.
Regulation changes on working from home arrangements
Although Covid-19 restrictions were already being lifted, many employers still opted to continue their remote work arrangements, allowing employees to work from home on a full-time basis or adopting a hybrid work setup where employees report to work onsite only on specific days of the week. This trend is likely to continue considering the benefits of remote or hybrid work setups where employers realize savings on operational expenses (e.g., electricity, water, and rent), while employees enjoy increased work-life balance. Because of the increased demand for hybrid work arrangements, even the Government has become flexible, particularly towards many PEZA (Philippine Economic Zone Authority) registered companies operating in the country. Thus, PEZA-registered companies that enjoy tax incentives only if they perform the qualified services within the special economic zones have been allowed to transfer their registrations from the agency administering the special economic zones to the Board of Investments so that they are able to continue enjoying tax incentives even if the qualified services are performed by their employees outside the special economic zones.
For its part, the Department of Labor and Employment saw it fit to revise the Implementing Rules and Regulations of Republic Act No. 11165 or the Telecommuting Act (Revised IRR), to better protect the rights of employees who are permitted to telecommute or to “work from an alternative workplace with the use of telecommunications and/or computer technologies.” The term alternative workplace is now more clearly defined under the Revised IRR to refer to as “any location where work through the use of telecommunication and/or computer technology, is performed at a location away from the principal place of business of the employer, including but not limited to the employee’s residence, co-working spaces, or other spaces that allow for mobile working.” The mandatory contents of a telecommuting agreement between the employer and employee are also better specified under the Revised IRR. Furthermore, the distinction between work performed in the regular workplace and alternative workplace is removed as the Revised IRR specifies that “[w]ork performed in an alternative workplace shall be considered as work performed in the regular workplace of the employer.” As regards the hours worked by telecommuting employees, the Revised IRR now provides that “all time that an employee is required to be on duty, and all time that an employee is permitted or suffered to work in the alternative workplace shall be counted as hours worked.” Lastly, the Revised IRR clarifies that “[t]elecommuting employees are not considered field personnel except when their actual hours of work cannot be determined with reasonable certainty.”
Although there are certain benefits to telecommuting arrangements, there are also disadvantages prompting the filing of bills in Congress to try to address them. One of these bills is Senate Bill No. 2475 or the Worker’s Rest Law. As stated in its explanatory note, this bill was filed because “technology and work-from-home arrangements distort the idea of work and home from the point of view of the employees” and because of “advances in technology, employees are now virtually always at the beck and call of their employers.” What is notable under this bill is that it imposes certain prohibitions on employers, with corresponding penalties for their violation, which include requiring employees to work and contacting them during their rest hours. House Bill No. 5620 also tries to address a downside of working from home arrangements, particularly the transfer of some of the costs from employers to employees. If this bill is passed, it would give telecommuting employees additional tax deductions from their taxable income and tax exemption for “allowances or other benefits granted by employers to their employees to cover expenses necessary for telecommuting.”
Enhanced benefits for solo parents
Another significant development in 2022 is the passage of Republic Act No. 11861 or the Expanded Solo Parents Welfare Act (Act) which increases the benefits provided to solo parents. Aside from reiterating the prohibition of work discrimination against solo parents, the amendments provide that employers may enter into telecommuting programs with solo parents and that employers must give priority to solo parents in entering into such programs. The Act also reduces the required period of service from one year to six months in order to be eligible to avail of the seven-day parental leave. There is also an expansion of the categories of solo parents entitled to solo parent benefits. An employee whose spouse is detained for three months will now qualify as solo parent. The required period of legal separation, de facto separation, or abandonment from the other spouse in order to qualify as solo parent is now six months instead of one year. New categories of solo parent are:
- [s]pouse or any family member of an Overseas Filipino Worker (OFW), or the guardian of the child or children of an OFW;
- any relative within the fourth civil degree of consanguinity or affinity of the parent or legal guardian who assumes parental care and support of the child or children as a result of the death, abandonment, disappearance or absence of the parents or solo parent for at least six months; and
- a pregnant woman who provides sole parental care and support to her unborn child or children.
Kathleen Healy Partner
Stephanie Chiu Counsel
Fan Li Associate
River He Associate